Sunday, June 4, 2023
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How media companies can create success for 2023 amid uncertainty

Media companies are facing challenging market conditions, including rising inflation affecting consumers’ purchasing power, the war in Ukraine, supply chain pressures and global currency constraints.

However, as companies begin planning for the 2023 sales cycle, they are adjusting their strategies to grow revenue in a business environment currently facing a broad economic contraction.

Focus on profitability and productivity

Companies are paying close attention to profitability and productivity. Research by Alexander Group shows that revenue growth in 2021 is faster than in previous years, and companies are spending less to increase revenue. Companies are optimistic about continuing this trend: 60% of media companies expect improved profitability in 2023 . Leading organizations are prioritizing existing customers for profitable growth, with 63% of media companies surveyed by Alexander Group expecting a renewed focus on revenue retention and expansion. According to Boostr’s Media Advertising Sales Trends report, net revenue retention (NRR) and revenue growth go hand in hand. NRR captures the percentage of revenue that existing customers maintain over time, providing a measure of revenue predictability. According to internal research by the Alexander Group, digital media companies have an average NRR of around 110%, with leaders as high as 140%. Efficiency is another key driver of profitability. Media companies are finding more imaginative uses for their salespeople, including horizontal integration capabilities and right-sizing organizations. To increase productivity, the company is rethinking sales compensation. The most important part of the plan is to ensure that the strategic components are aligned with the expected growth areas. The company reviews guidelines on the distribution of expected performance (how many sellers are below, on, and above targets) and ensures planning mechanisms, policies and terms are in place for a potentially volatile year. Increased market uncertainty puts more emphasis on productivity indicators. For successful businesses, establishing a baseline of fundamental benchmarks provides the basis for measuring and addressing deviations from the norm. As part of this process, acquisition costs, NRR and revenue-to-expense ratios are leading productivity indicators.

How companies can upgrade their sales process

In uncertain times, organizations can Help sellers focus on the right buyers to increase sales efficiency. If sellers don’t understand customers, targets, key buyers, and influence levels, they can get stuck. Rather than letting sellers speculate on their best targets, companies can use the revenue growth mapping process to unlock market potential. Media companies are embracing the fact that the buyer journey has changed and sales actions must evolve. People, not accounts, make media buying decisions. Individuals inside and outside the organization set, approve, and influence media and advertising budgets; as a result, buying entities (BEs) often exceed expectations. In order to adapt the sales process to target individuals making media buying decisions, successful companies often use seller roadmaps to mitigate uncertainty and set performance expectations. This roadmap begins with identifying account archetypes and understanding the level and process of media strategy and buying decisions. Identifying BEs, including blank entities and current accounts, allows teams to calculate total addressable market (TAM) and wallet share to uncover media spend potential. The team also mapped all points of contact within each BE and agency, categorizing contacts according to their purchasing impact. Finally, the company communicates a roadmap that enables sales teams to compare and refresh customer data every six months.

Media companies are prioritizing their employees

People are the most valuable asset. Even in the most uncertain times, developing an inclusive approach with transparent compensation, clear performance opportunities and career mobility can help companies attract, retain and develop their workforce. According to research by Alexander Group, media companies report an unprecedented increase in average compensation costs for account managers, with turnover as high as 10% to 20%, which has a significant impact on after-sales roles. These labor cost increases are hitting the bottom line, while ongoing disruptions to account management erode revenue retention. In 2023, media companies will make satisfying their sales teams a top priority. One of the most successful practices is designing and implementing a career management framework. Cutting-edge organisations are developing career programmes that offer thoughtful and non-traditional pathways aligned with complementary skill sets. These internal pathways help retain high performers and provide new trajectories for those who feel stagnant in their careers. Employees are increasingly attracted to companies that embody the principles of diversity, equity and inclusion. DEI requires leadership to honestly evaluate the current state of compensation programs, identify gaps and take appropriate action to correct pay inequities. Not surprisingly, leading media companies that have developed career mobility programs and pathways have seen positive effects on profitability and productivity.

Overcoming uncertainty

Economic difficulties require business leaders to pay more attention And focus on the response, not less. Companies that are successful in achieving sustained profitability, increasing productivity, and building processes do so because they invest in their people and operations during times of uncertainty. Ongoing strategies with a focus on 2023 and beyond are key for companies to overcome uncertainty. As successful companies have demonstrated in 2022, growth isn’t elusive, but it requires commitment, planning, and investment in the right resources to achieve sustained success. Sponsor: Alexander Group



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